A perfect storm: an impossible climate for NHS providers' finances? (Slidepack of all charts)

A perfect storm: an impossible

climate for NHS providers’ finances?

Sarah Lafond, Anita Charlesworth and Adam Roberts

March 2016

Figure 1.1: Resource spending in real terms in England,

2014/15 (2015/16 prices, £bn)

March 2016 A perfect storm: an impossible climate for NHS providers’ finances?

Table 1.1: Health Expenditure in England from 2009/10 to 2015/16 (2015/16 prices)

2009/10 2010-11 2011-12 2012-13 2013-14 2014-152015-16 (planned)

health expenditure, £110.2 £109.1 £110.1 £110.6 £113.0 £114.9 £116.4

annual change, real terms (£bn) -0.9% 0.9% 0.5% 2.2% 1.7% 1.3%

health spending per head £2,111 £2,073 £2,072 £2,067 £2,098 £2,116 £2,138

annual change, real terms -1.8% 0.0% -0.3% 1.5% 0.9% 1.0%

Figure 2.1: Breakdown of NHS England increase spending,

2013/14 to 2014/15 (2015/16 prices)

Figure 2.2: Commissioner spending, 2014/15, (2015/16

prices)

Figure 2.3: Annual change in CCGs planned spending,

2013/14 to 2015/16, real terms

Figure 2.4: Annual change in CCG planned spending by

service area, 2014/15 to 2015/16, real terms

Figure 2.5: Breakdown of commissioner spending of non-

NHS providers, 2014/15 (2015/16 prices)

Figure 2.6: Annual change in NHS commissioner spending

on care provided by non-NHS providers, 2013/14 to

2014/15, real terms

Figure 2.7: Change in the proportion of commissioner

spending on non-NHS providers, real terms

Table 3.1: Number of trusts as of March 31 2015

Type of trusts Number of trusts Percentage

Acute 137 57%

Ambulance 10 4%

Community 19 8%

Mental Health 56 23%

Specialist 19 8%

TOTAL 242

Note: This table excludes mergers and trusts that were dissolved

Figure 3.1: Net reported surplus/deficit for NHS providers

between 2012/13 and quarter 3 of 2015/16, £m (2015/16

prices)

Figure 3.2: Number of trusts in deficit, 2012/13 to Q3

2015/16

Figure 3.3: Net deficit by region, 2012/13 to 2014/15

(2015/16 prices)

Figure 3.4: Sources of NHS providers' 2014/15 operating

income and breakdown of £1.4bn annual change (2015/16

prices)

Figure 3.5: Annual change in operating costs and income

by type of providers in real terms, 2013/14 to 2014/15

Figure 3.6: Staff cost by type of employee (2015/16 prices)

Figure 3.7: Annual change in staff cost by type, 2013/14 to

2014/15, real terms

Figure 3.8: Skill mix of permanent and agency staff costs

for foundation trusts, Q1 of 2015/16 (£m)

Figure 3.9: Number of nurses employed in acute, general

and elderly sectors, excluding bank and agency staff.

Figure 3.10: Trends in nurse-to-patient ratio, admissions

and length of stay, 2010 to 2015

Figure 3.11: Agency staff cost as a percentage of total staff

cost in England

Area team code

Q44 Cheshire, Warrington & Wirral Q57 Essex

Q45 Durham, Darlington and Tees Q58 Hertfordshire and South Midlands

Q46 Greater Manchester Q59 Leicestershire and Lincolnshire

Q47 Lancashire Q60 Staffordshire & Shropshire

Q48 Merseyside Q64Bath, Gloucestershire, Swindon and Wiltshire

Q49Cumbria, Northumberland, Tyne &Wear Q65

Bristol, North Somerset, Somerset & South Gloucestershire

Q50 North Yorkshire & Humber Q66 Devon Cornwall & Isles of Scilly

Q51 South Yorkshire & Bassetlaw Q67 Kent and Medway

Q52 West Yorkshire Q68 Surrey and Sussex

Q53Arden, Herefordshire and Worcestershire Q69 Thames Valley

Q54Birmingham, Solihull and the Black Country Q70 Wessex

Q55 Derbyshire & Nottinghamshire Q71 LondonQ56 East Anglia

Figure 3.12: Employment status of chief executive of NHS

providers by type as of September 2015

Figure 3.13: Employment status of chief executive of NHS

providers in trusts in surplus and deficit

Table 3.2: Average annual increase in hospital activity based on providers’ time series, 2008/09 -2015/16

2008/09-2010/11 2011/12-2014/15Outpatient first attendances 5.3% 2.6% Total admissions 3.0% 2.2%of which: non-elective 2.8% 1.7%elective 3.2% 2.5% A&E admissions 2.7% 2.3%

Figure 3.14: Change in CCGs’ planned activity for 2015/16

Figure 3.15: Proportion of income covered by tariff income

by size and type of acute trusts, 2012/13 and 2014/15

Figure 3.16: Productivity, technical and allocative efficiency

Table 3.3: Change in cost adjustment factors of national tariffs

2012/13 2013/14 2014/15

Cost uplift factor 2.2% 2.7% 2.5%

Efficiency requirement

-4.0% -4.0% -4.0%

Total cost adjustment -1.8% -1.3% -1.5%

Figure 3.17: Change in hospital productivity, 2009/10 to

2014/15

Figure 3.18: Annual change in hospital productivity index,

2009/10 to 2014/15

Figure 3.19: Annual change in income from private

patients, 2009/10 to 2014/15, in real terms

Table 3.4 – Annual increase in hospital and community health services (HCHS) pay and price index and cost uplift factor (CUF), 2011/12 and 2014/15

HCHS pay and price index Cost Uplift Factor

2012/13 1.7% 2.2%

2013/14 1.1% 2.7%

2014/15 0.9% 2.5%

Figure 3.20: Annual average rate of income from private

patients from 2009/10 to 2014/15, real terms

Table 4.1: Estimations of results of multivariate regression model on net deficit as a proportion of total cost (r^2 = 0.4597)

Variable1 Parameter estimate2

Standard error3

Specialist*** 0.02635 0.00788Total number of hospital sites*** 0.000268 7.58E-05Agency cost*** -0.37047 0.07524Tariff income above average*** -0.014 0.00496If a friend or relative needed treatment I would NOT be happy with the standard of care provided by this organisation(%)***

-0.00098 0.000432

Inadequate CQC rating* -0.02132 0.01129

[1] *Significant at 90% confidence level, **Significant at 95% confidence level, ***Significant at 99% confidence level.[2] Parameter estimate refers to the variable coefficient. It indicates the nature of the relationship between the dependent variable (positive or negative) and the linear dependence between tow variables[3] Standard error measures derivation from the mean

Figure 4.1: Net deficit and agency staff spend

Figure 4.2: Relationship between staff satisfaction with

standard of care and financial performance

Figure 4.3: Association between 66 hospitals’ financial

position and their CQC risk inspection rating, 2014/15

Figure 4.4: Proportion of income from PbR tariff for acute

providers reporting a net deficit compared to providers

reporting net surplus, 2014/15

Figure 5.1: The public-private hourly pay differential for

workers with similar characteristics

Table 5.1: University of York NHS productvity estimates

Total Factor productivity Growth (mixed method)

Total Factor productivity Growth (indirect method)

2009/10 - 2010/11 3.2% 3.7%2010/11 - 2011/12 2.1% 2.4%2011/12 - 2012/13 0.4% -0.3%2012/13 - 2013/14 2.2% 2.1%Annual average 2004/05 to 2013/14

1.4% 1.4%

Annual average 2009/10 to 2013/14

2.0% 2.0%

Source: Bojke et al 2016

Table 5.2 NHS QIPP savings 2011-12 to 2014/15

Year Outturn/forecast Saving (£ bn), cash terms

Saving (£ bn) 2015/16 prices

2011-12 Outturn 5.8 5.92012-13 Outturn 5.0 5.12013-14 Outturn 4.3 4.42014-15 Outturn 1.8 1.8TOTAL 16.9 17.1Source: correspondence with NHS England on 04/02/2016

Figure 5.2: Number of training places commissioners for

clinical staff, 2004/05 to 2014/15

Figure 5.3: Annual change in NHS spend per head in England, in real terms

Figure 5.4: Variation in productivity of hospital, 2009/10 to

2014/15

Thank youFind out more at www.health.org.uk/perfectstorm

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A perfect storm: an impossible climate for NHS providers' finances? (Slidepack of all charts)

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